* As part of the sale mandate, undertake a pre-sales due diligence exercise using an independent party to review your company, taking the opportunity to “put right” anything they may discover before you market the business. This will stop last-minute chips on the acquirer’s discoveries following their own due diligence exercise.
* In your heads of terms, agree a fee compensation deal for an acquirer that pulls out of the deal for an issue you have made them aware of pre-heads.
* Keep your lawyer out of all commercial negotiations. The devil may be in the detail but a non-commercial lawyer (aka most of them) can be the very devil on deal success.
* Avoid email negotiations (tempting as it is). Get all parties around the table as soon as possible. With a good negotiator on your side, this will cut through issues much more quickly and you will either be “deal on” or “deal off” much quicker.
* If something goes wrong in the business mid-deal, come clean straight away – ideally with a solution, if not a resolution.
* Remember: banks are all but shut. It could be that, even if the acquirer wants the deal, their funders don’t. In this situation you need to consider three things very seriously: 1) would another buyer have the same problem if you slam the door on this one? 2) Bearing in mind where you are on the timeline, is it suitable to accept a price cut? 3) Can you bridge the issue with a vendor loan (which, incidentally, you may even be able to insure)?
* Deal times are taking much longer, mostly due to credit approval from funders. Be patient but make sure your corporate financier doesn’t let the deal drag on for longer than necessary. For some parties in a transaction, this will be one of a multiple of deals. Make sure yours is a priority.
* Warranties and indemnities are always the nightmare part of the negotiations yet, in more than 20 years of doing deals, I have never known anyone bring a claim. The acquirers will want you to warranty everything; your lawyers will want you to promise nothing. Getting to the mid-ground is a painful and expensive process. Take a reasonable position.
* Above all, stay calm. Don’t lose track of your business – you may need to go back to it so don’t take your eye off the ball.
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